Trust Accounts Act 1973

This Act may be cited as the Trust Accounts Act 1973.

In this Act—agent, of a trustee, includes—

the manager of the trustee’s financial institution; and

the trustee’s accountant or auditor, whether or not an employee of the trustee; and

anyone who has been, or acted as, the manager of the trustee’s financial institution or as accountant, auditor or other agent of the trustee.

approved...approved form see section 37.Australian legal practitioner...bank...contributor see the Funeral Benefit Business Act 1982, section 5.conveyancer...Director-General...financial period, for a trustee, means—

for the first period after the trustee becomes a trustee—the period (not more than a year) starting on the day the trustee becomes a trustee and ending on 31 March; or

for any other period—a year ending on 31 March.

funeral benefit agreement see the Funeral Benefit Business Act 1982, section 5.Minister...moneys includes an instrument for the payment of money in any case where the instrument may be paid into a financial institution.moneys received for or on behalf of any person includes moneys held for or on behalf of any person whether originally received for or on the person’s behalf or not.person...public accountant means a person who as a principal either alone or with others carries on the business of—

general accountancy; or

the auditing of accounts; or

general accountancy and the auditing of accounts;

and who places the person’s services in such regard at the disposal of the public generally for remuneration and whose services are not either entirely or mainly at the disposal of any individual, firm, trust or association (corporate or unincorporate).Public Trustee...repealed Acts...solicitor...supervising entity see section 4E.trust account means a trust account kept under this Act, whether established before or after 1 July 1973.trustee see section 4AA.trust moneys, in relation to a trustee, means moneys received for or on behalf of a contributor that is a party to a funeral benefit agreement.Under Secretary...

A trustee is an entity, other than a contributor, that is a party to a funeral benefit agreement entered into on or after 1 December 2003.

However, the following are not trustees—

an authorised deposit-taking institution under the Banking Act 1959 (Cwlth);

a company registered under the Life Insurance Act 1995 (Cwlth).

In this Act any reference to moneys received by a trustee shall be deemed to include a reference to moneys received in the course of or in connection with the practice, or carrying on of business, by any partner of that trustee or by any of his or her or the firm’s clerks or employees or by any trustee with whom he or she or the firm shares the remuneration of any practice or business.

In this Act, any reference to books, accounts, records, securities, trust accounts or practice or business of or in relation to a trustee who carries on practice or business in partnership shall be read and construed as a reference to books, accounts, records, securities, trust accounts or practice or business (as the case requires) of or in relation to the partnership.

A supervising entity is an entity that under subsection (2) or (4) is the supervising entity for a trustee.

An entity is the supervising entity for a trustee if a regulation declares the entity to be the supervising entity for the trustee.

However, a regulation may declare an entity to be a supervising entity only if the chief executive is satisfied—

the entity has the qualifications, experience or standing necessary to perform the functions of a supervising entity under this Act; and

anyone the entity employs to perform the functions has the qualifications, experience or standing necessary to perform the functions.

If a regulation does not declare an entity other than the chief executive to be the supervising entity for a trustee, the chief executive is the supervising entity for the trustee.

A reference to a supervising entity made in relation to a trustee is a reference to the trustee’s supervising entity.

A reference to a supervising entity made in relation to an auditor performing duties as an auditor under this Act is a reference to the supervising entity of the trustee in relation to whom the duties are performed.

Every person who becomes a trustee shall, within 14 days after the person becomes a trustee, lodge with the supervising entity notice in writing of that fact in the approved form.Maximum penalty—5 penalty units.

The notice shall state the full name and full address of the place of practice or business of the trustee and, where the trustee carries on practice or business in partnership, the full names of the persons with whom the trustee carries on such partnership and the name under which the partnership is conducted and shall contain such other particulars as may be prescribed.

Where there is any material change in any of the particulars required to be notified under subsection (1) or (1A) or, in the case of a person who is a trustee at the commencement of this Act, in any particulars that the person would have been required to notify under the subsections if the person had become a trustee after the commencement of this Act, the trustee shall, within 14 days after the change, lodge with the supervising entity notice in writing of the change in the approved form.Maximum penalty—5 penalty units.

Upon ceasing to be a trustee, the person who has ceased to be such, shall forthwith lodge with the supervising entity notice in writing of that fact in the approved form.Maximum penalty—5 penalty units.

A trustee shall, before establishing any account under section 7, notify the supervising entity in writing of the trustee’s intention so to do, specifying the financial institution and the office or branch thereof in which the trustee proposes to open the account and the designation of the account, and shall satisfy the manager or other officer in charge of the office or branch of the financial institution concerned that the trustee has complied with the requirements of this subsection.Maximum penalty—5 penalty units.

A trustee must immediately give to the supervising entity written notice of the establishment of a trust account and the name and the office or branch of the financial institution at which the account is established.Maximum penalty—100 penalty units.

If any of the following happen, the trustee must immediately give to the supervising entity written notice of that fact—

a change in the name of a trust account;

the transfer of a trust account to another office or branch of the financial institution at which the account is established;

the transfer of a trust account to another financial institution;

the closing of a trust account.

Maximum penalty—100 penalty units.

A trustee shall keep or cause to be kept in written or printed form in the English language such accounting and other records of all trust moneys and of any disbursement or disposal thereof or dealing therewith as will sufficiently explain the transactions and true position in regard thereto and enable true and fair accounts to be prepared from time to time and shall keep or cause to be kept those records in such manner as to enable them to be conveniently and properly audited.Maximum penalty—10 penalty units.

Where trust moneys are disbursed by a trustee by way of investment which the trustee has been lawfully directed to subsequently realise with a view to the disposal of the proceeds in accordance with the directions of the person entitled thereto then, where the investments are in the name of the trustee or under the trustee’s control or the trustee has authority for disposal thereof, the duty of the trustee under this Act with respect to the keeping of accounts and other records of trust moneys and accounting therefor extends at all times in relation to the investments in all respects as if the investments were trust moneys within the meaning of this Act.

Unless—

the supervising entity otherwise approves in writing; or

an auditor has actual possession of a trustee’s accounting and other records relating to trust moneys for the time reasonably necessary to audit them under this or any other Act;

a trustee must keep all accounting and other records relating to trust moneys at the trustee’s sole or principal place of business or at another place of the trustee’s business the supervising entity approves in writing.Maximum penalty—10 penalty units.

Subject to the Evidence Act 1977, section 111 a trustee shall retain for a period of not less than 7 years, the records referred to in subsection (1).Maximum penalty—10 penalty units.

Without affecting the generality of subsection (1), a trustee—

shall keep or cause to be kept such books, accounts and records as may be prescribed; and

shall keep or cause to be kept the trustee’s books, accounts and records in such form and manner as may be prescribed.

Maximum penalty—10 penalty units.

For the purposes of this section any account or record required to be kept by a trustee may be kept either by making entries in a bound book or by recording the matters in question in any other way.

Where any account or record required by this section to be kept by a trustee is not kept by making entries in a bound book the trustee shall take reasonable precautions for guarding against falsification and for facilitating discovery of any falsification.Maximum penalty—10 penalty units.

Every entry in any book, account or record kept by or belonging to a trustee or found at the trustee’s place of practice or business shall be deemed, until the contrary is shown to have been made by or at the direction of the trustee.

The power to make regulations under section 41 includes power to prohibit—

the keeping of specified books, accounts or records by a trustee; and

the keeping of books, accounts or records by a trustee in a specified form or manner; and

the adoption by a trustee of specified accounting procedures in respect of the trustee’s books, accounts and records.

A trustee shall establish and keep in a financial institution in the State 1 or more trust accounts designated or evidenced as such into which the trustee shall pay all trust moneys.

However, a trustee is not required to pay trust moneys into a trust account if—

the trust moneys consist of a cheque drawn in favour of someone else; and

the trustee is satisfied the person is lawfully entitled to the moneys; and

the trustee immediately gives the person the cheque, personally, by post or at the person’s direction.

A trustee shall not pay—

to the trustee’s general trust account any moneys other than trust moneys received by the trustee; and

to a separate trust account any moneys other than trust moneys received by the trustee for or on behalf of the person on whose behalf or at whose direction the account was established;

but nothing in this subsection prohibits payment into the trustees’ general trust account of moneys received by the trustee where part of such moneys are attributable to professional costs, statutory duties or charges and other proper outlays already incurred or disbursed.

Moneys required by this section to be paid into a trust account shall be so paid daily save where it is not reasonably practicable so to do in which case they shall be so paid as soon as reasonably practicable.

A person must not contravene this section.Maximum penalty—

50 penalty units; or

if the offence is committed with intent to defraud—100 penalty units or 1 year’s imprisonment.

Save as otherwise provided in this Act, moneys held in a trust account shall not be available for the payment of the debts of the trustee by whom the account is kept to any other creditor of the trustee or be liable to be attached or taken in execution under the order or process of any court at the instance of any such creditor.

A trustee shall not draw against or cause any payment to be made from a trust account kept by the trustee under this Act unless the drawing or payment is made by the trustee’s cheque or by a cheque drawn on or that permits or enables payment to be made by a financial institution, crossed and marked on its face ‘not negotiable’ and payable to order.Maximum penalty—10 penalty units.

Cheques drawn on a trustee’s trust account shall be drawn on cheque forms having pre-printed on the face thereof a direction to pay to order, a crossing ‘not negotiable’ and the words ‘Trust Account’.

Within 14 days of demand in writing made by the person for whom or on whose behalf trust moneys have been received or are held by a trustee and to which the person is then entitled the trustee shall pay to the person entitled thereto the balance of the moneys to which that person is entitled or as that person may direct in writing unless the trustee has already disposed of the moneys in accordance with a requirement made under section 33 in which case the trustee shall notify the person entitled to the moneys of that fact giving full particulars thereof.Maximum penalty—10 penalty units.

Where, before the making of a payment pursuant to subsection (3), a trustee has received notice in writing from any person who was a party to the business, proceeding or transaction in respect of which the moneys were received that the ownership of the moneys is in dispute, the trustee shall not without the written consent of the parties make payment of any such moneys until such time as—

all parties to the business, proceeding or transaction notify the trustee in writing that the dispute has been resolved and inform the trustee as to the person to whom the moneys are to be paid, whereupon the trustee shall forthwith pay the moneys to that person or as that person may direct in writing; or

the trustee is advised that legal proceedings have been commenced to determine the ownership of the moneys whereupon the trustee shall forthwith pay the moneys into the court in which the proceedings have been taken to abide the decision of the court; or

where no notice or advice is received by the trustee pursuant to paragraph (a) or (b) within a period of 60 days after the receipt of the notice firstmentioned in this subsection, the said period expires.

Maximum penalty—10 penalty units.

This section does not prevent a financial institution causing a payment to be made from a trustee’s trust account kept at a financial institution by electronic funds transfer.

However, the financial institution must ensure it keeps accurate records of each transfer and the purpose of the transfer.

Subsection (5) applies only if the trustee has the written approval of the supervising entity to make electronic funds transfers from the trust account.

A trustee within 14 days of demand in writing made by the person for whom or on whose behalf trust moneys have been received or are held by the trustee and to which the person is entitled, shall render to the person entitled to the moneys a correct and detailed account in writing of all such moneys and of the application thereof unless the trustee has already disposed of the moneys in accordance with a requirement made under section 33 in which case the trustee shall notify the person entitled to the moneys of that fact giving full particulars thereof. Maximum penalty—50 penalty units.